How to create a cloth stage valance?
Final result:



Base mesh:

As a base mesh we will use simple Plane rotated by 90 degrees and subdivided couple of times. Less subdivision = bigger wrinkles. 

I've used Subdivide > 10 and than Subdivide > 1.

We need to add Mean Crease > 1 to the outer edge for Subdivision Surface modifier that we will add later on. 



Vertex Group:

For Pinning Cloth we will add Vertex Group with two side edges assigned.



Shape Keys:

For folding our Cloth we need to add Shape Keys - Basis and Key 1 with shrunken side edges moved to the top of the mesh.



We can go ahead and animate Key 1 value by inserting keyframes on frame 0 with value 0 and frame, lets say, 25 with value 1.



Cloth settings:

Now we can finally add Cloth simulation to our mesh with below settings.



Most important are:


Pinning - select Vertex Group we have created before.
Mass - higher mass more curve on cloth.
Structural - lower allow more cloth stretching.
Velocity - will slow down/smooth simulation.
Self collision - self explanatory, Distance is important, it prevents cloth from intersecting.


Rest of the settings are more or less important tweaks, described in tool tips and docs.

Final touches:

Now we can add Subdivision Surface modifier and play our animation to see result (this one is 80 frames long):



Thoughts:

You can experiment with base mesh randomization, subdivision or Cloth settings to get different results. 

Material used in Final Results is default Velvet BSDF with changed color. 

Back drapes are made using same method.